Wheat prospects look good as 2008 harvest nears

HarvestFunkP6100006.jpg
HarvestFunkP6100006.jpg

With wheat prices increasing from the $3 a bushel range a year ago to the $7 to $8 range this year, local producers anticipate a propserous harvest, barring weather calamities. Prices have climbed because of world demand and declines in supply.

by Jerry Engler

The Free Press

Marion County farmers and most of their near neighbors appeared poised last week for a wheat harvest that could bring in near-record gross income from the golden grain.

They had escaped the hail, wind and tornadoes that unfortunately were ruining harvest hopes in other parts of the state.

Wheat prices that were in the $3 a bushel range a year ago are expected to be in the $7 to $8 range this year, according to market estimates. Prices have climbed because of world demand and declines in supply.

The market was strengthened last week by a bump in futures prices that the Kansas Wheat Commission was crediting to market crossover concern about corn yields reduced by floods and weather.

All of the news should cause a stir to anyone in Marion County because it represents a lot of money coming soon into the local economy.

Mike Thomas, Cooperative Grain & Supply elevator manager at Marion, estimated that given a little sun and wind, the wheat will fully ripen for harvest to begin about Friday or Satur?day of this week.

He said the wheat ?ought to be above average, which is just what we need after it freezing out last year.

?Actually, there?s going to be a lot of awfully good wheat out there,? he added. ?But the guys are refraining from bragging for fear a hail storm or something will hit. They?re excited, pretty anxious, very hopeful compared to last year because the prices are good, too.?

Thomas said the acreage of wheat planted in the county has remained stable but production has continued to increase as varieties and fertilizer inputs have improved.

He noted that the official Marion County average wheat yield is 36 bushels an acre, but much of the data for that were set a long time ago.

?Most guys will average 42 to 45 bushels an acre now, and this appears to be an above average year,? he said.

Thomas said he has kept ahead of the 8-ball, emptying all the grain he can from the Marion facility. And, for the first time, he and his coworkers will have their new 300,000-bushel bin to catch the wheat overflow from the 460,000-bushel elevator they have had in the past.

With a total capacity of 760,000 bushels, Thomas said CG&S will be able to contain even an unusually large harvest, plus be a benefit to other grain companies in the area by not tying up trucks they can use during a truck shortage.

Thorns amid the roses

The harvest won?t totally be a bed of roses, however, even with fortunate weather holding to the end. Thomas said the spirits and hopes of all the farmers are tempered by the spiraling costs of fuel and fertilizer?anything connected to oil prices.

A record gross income is just that, and not necessarily a measure of net income.

He and the producers he talks to realize the costs will be tough this year, and no one knows what they will be when the 2009 wheat crop is planted this fall.

The Kansas Wheat Commission said producers are ?facing costs like they?ve not seen before.?

A recent Kansas Ag Statistics report showed a 1.6 percent increase since April for production prices for everything from fertilizer, chemicals, diesel and even tires, with a 19 percent jump since a year ago.

The U.S. Department of Agriculture reported the fertilizer component of production prices increased 5.8 percent since April 2008 and 69 percent from May 2007.

The USDA reported that fuels used in agricultural production rose 6.2 percent since April and 49 percent since May of last year.

KWC expected custom-cutting charges to average about $20 to $25 an acre compared to $17 an acre in 2007.

The harvest so far

The wheat harvest was proceeding from south to north, as it always has, coming up from Texas then Oklahoma to reach southern Kansas last week.

The KWC said yields and test weights throughout the harvest have remained high despite the weather disasters in some areas. Parts of southcentral Kansas had rainfall up to 200 percent of normal in 14 days, KWC said.

Last week the USDA projected the U.S. winter wheat crop at 1.817 billion bushels, an average of 45.3 bushels per acre, the largest crop since 1998. The Kansas yield was expected to be close to 380 million bushels.

According to figures from the Chicago Futures Market, world wheat output for 2008-09 is projected at a record 656 million metric tons.

Among the largest producers, yields were expected to be up 25 percent in Canada, 17 percent in the European Union, 16 percent in the United States, 3 percent in China, 7 percent in the Black Sea region and 1 percent in India.

The top 10 foreign customers for U.S. wheat were listed as Japan, Egypt, Mexico, Nigeria, Iraq, the European Union, the Philippines, South Korea, Taiwan and Indonesia.

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